For legal and title purpose the answer is yes. But from a tax perspective if the terms of the trust make this a so-called "grantor " trust you may still be the owner for tax purposes.
Mr. Fromm is licensed to practice law in PA with offices in Philadelphia and Montgomery Counties and services clients in all parts of Pennsylvania. He can be reached at 215-735-2336 or at the email address listed below. He has an AV Preeminent Rating (5.0 out of 5.0) with Martindale-Hubbel, the highest possible rating for legal ability and ethical standards. Also, he has received a 10.0 rating from AVVO and was featured as a 5Star Wealth Manager in the Philadelphia Magazine, November 2009 issue on page 123.
Mr. Fromm is ethically required to state that the response herein is not legal advice and does not create an attorney/ client relationship. Also, there are no recognized legal specialties under Pennsylvania law. Any references to a trust, estate or tax lawyer refer only to the fact that Mr. Fromm limits his practice to these areas of the law. These responses are only in the form of legal education and are intended to only provide general information about the matter within the question. Oftentimes the question does not include significant and important facts and timelines that if known could significantly change the reply or make such reply unsuitable. Mr. Fromm strongly advises the questioner to confer with an attorney in their state in order to ensure proper advice is received.
By using this site you understand and agree that there is no attorney client relationship or confidentiality between you and the attorney responding. This site should not be used as a substitute for competent legal advice from a licensed attorney that practices in the subject area in your jurisdiction, who is familiar with your specific facts and all of the circumstances and with whom you have an attorney client relationship. The law changes frequently and varies from jurisdiction to jurisdiction. The information and materials provided are general in nature, and may not apply to a specific factual or legal circumstance described in the question or omitted from the question.
Circular 230 Disclaimer - Any information in this comment may not be used to eliminate or reduce penalties by the IRS or any other governmental agency.
If your concern is with the "due on sale" clause of your mortgage, contact your lender and let them know of your desire to put the property in an Illinois Land Trust and that the beneficiaries under the trust will be the same as the current owners and held in the same capacity (e.g. Tenants in common, tenancy by the entireties)
Once notified, they should be willing to allow the transfer without calling the Note due. - Make sure you get it in writing.
This answer does not constitute legal advice and does not and is not intended to create an attorney-client relationship. The law may vary depending on the state in which you reside. It is intended only to give some direction in which to seek assistance.
I agree with my colleagues. From a legal and title perspective, ownership has changed. For tax purposes, generally speaking a land trust is like a grantor trust - the property is still considered held by you (and any income, deductions and depreciation should flow through to you), and upon your death, the property will pass according to the terms of the land trust/beneficiary designation (so it will not be subject to probate).
Since it is a change in ownership/title, the "due on sale" clause could be an issue. If it is, I would also follow Ms Minchella's advice.
This answer is for informational purposes only and is not intended to be legal advice nor does it establish an attorney-client relationship. You should consult a local real estate lawyer to obtain legal advice that is tailored to your circumstances and facts. Good luck to you.